Blackstone reaps rewards from debt restructuring with Hilton IPO. One of the biggest bondholders in the restructuring was the New York Fed.

One of the underappreciated skills of the private-equity crowd is negotiation. A prime example is the 2010 Hilton debt restructuring in which Blackstone Group bested a group of bondholders after months of talks. At the time, Blackstone was desperate to salvage its pricey 2007 leveraged buyout of the hotel chain. The restructuring allowed Hilton to shed $4 billion in debt to a manageable $16...